Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 17, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ARCA Biopharma, Inc. | ||
Entity Central Index Key | 907,654 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ABIO | ||
Document Fiscal Year Focus | 2,016 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 13,785,280 | ||
Entity Common Stock, Shares Outstanding | 9,130,926 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 7,401 | $ 38,802 |
Marketable securities | 13,762 | |
Other current assets | 282 | 114 |
Total current assets | 21,445 | 38,916 |
Marketable securities | 2,352 | |
Property and equipment, net | 66 | 28 |
Other assets | 766 | 630 |
Total assets | 24,629 | 39,574 |
Current liabilities: | ||
Accounts payable | 1,205 | 364 |
Accrued compensation and employee benefits | 719 | 669 |
Accrued expenses and other liabilities | 472 | 471 |
Total current liabilities | 2,396 | 1,504 |
Deferred rent, net of current portion | 39 | |
Total liabilities | 2,435 | 1,504 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5 million shares authorized; no shares issued or outstanding at December 31, 2016 and 2015 | ||
Common stock, $0.001 par value; 100 million shares authorized at December 31, 2016 and 2015; 9,082,366 and 9,051,217 shares issued and outstanding at December 31, 2016 and 2015, respectively | 9 | 9 |
Additional paid-in capital | 134,715 | 134,128 |
Accumulated other comprehensive loss | (19) | |
Accumulated deficit | (112,511) | (96,067) |
Total stockholders’ equity | 22,194 | 38,070 |
Total liabilities and stockholders’ equity | $ 24,629 | $ 39,574 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 9,082,366 | 9,051,217 |
Common stock, shares outstanding | 9,082,366 | 9,051,217 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Costs and expenses: | ||
Research and development | $ 12,348 | $ 7,063 |
General and administrative | 4,265 | 4,392 |
Total costs and expenses | 16,613 | 11,455 |
Loss from operations | (16,613) | (11,455) |
Interest and other income | 169 | 14 |
Interest expense | (4) | |
Net loss | (16,444) | (11,445) |
Change in unrealized loss on marketable securities | (19) | |
Comprehensive loss | $ (16,463) | $ (11,445) |
Net loss per share: | ||
Basic and diluted | $ (1.81) | $ (1.82) |
Weighted average shares outstanding: | ||
Basic and diluted | 9,067,438 | 6,289,305 |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance, shares at Dec. 31, 2014 | 3,021,498 | ||||
Beginning Balance at Dec. 31, 2014 | $ 14,741 | $ 3 | $ 99,360 | $ (84,622) | |
Issuance of common stock for cash, net of offering costs, shares | 6,003,082 | ||||
Issuance of common stock for cash, net of offering costs | 34,175 | $ 6 | 34,169 | ||
Issuance of common stock upon vesting of Restricted Stock Units, shares | 26,669 | ||||
Issuance of common stock upon vesting of Restricted Stock Units, value | 0 | $ 0 | 0 | $ 0 | 0 |
Adjustment for fractional shares | (32) | ||||
Share-based compensation | 599 | 599 | |||
Net loss | $ (11,445) | (11,445) | |||
Ending Balance, shares at Dec. 31, 2015 | 9,051,217 | 9,051,217 | |||
Ending Balance at Dec. 31, 2015 | $ 38,070 | $ 9 | 134,128 | (96,067) | |
Issuance of common stock upon vesting of Restricted Stock Units, shares | 31,149 | ||||
Issuance of common stock upon vesting of Restricted Stock Units, value | 0 | $ 0 | 0 | 0 | 0 |
Share-based compensation | 576 | 576 | |||
Change in unrealized loss on marketable securities | (19) | (19) | |||
Other | 11 | 11 | |||
Net loss | $ (16,444) | (16,444) | |||
Ending Balance, shares at Dec. 31, 2016 | 9,082,366 | 9,082,366 | |||
Ending Balance at Dec. 31, 2016 | $ 22,194 | $ 9 | $ 134,715 | $ (19) | $ (112,511) |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (16,444) | $ (11,445) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 24 | 19 |
Amortization of other assets | 296 | 189 |
Amortization of premiums and discounts on marketable securities | 161 | |
Share-based compensation | 576 | 599 |
Change in operating assets and liabilities: | ||
Other current assets | (47) | 213 |
Other assets | (432) | (211) |
Accounts payable | 841 | (431) |
Accrued compensation and employee benefits | 50 | 340 |
Accrued expenses and other liabilities | (3) | 196 |
Other | (9) | (3) |
Net cash used in operating activities | (14,987) | (10,534) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (12) | (11) |
Purchases of marketable securities | (20,504) | |
Proceeds from maturities of marketable securities | 4,102 | |
Net cash used in investing activities | (16,414) | (11) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock | 37,000 | |
Common stock offering costs | (2,814) | |
Repayment of principal on vendor finance agreement | (193) | |
Net cash provided by financing activities | 33,993 | |
Net (decrease) increase in cash and cash equivalents | (31,401) | 23,448 |
Cash and cash equivalents, beginning of period | 38,802 | 15,354 |
Cash and cash equivalents, end of period | 7,401 | 38,802 |
Supplemental cash flow information: | ||
Interest paid | 4 | |
Supplemental disclosure of noncash investing and financing transactions: | ||
Common stock offering costs accrued but not yet paid | (11) | $ 11 |
Change in unrealized loss on marketable securities | (19) | |
Leasehold improvement lease incentive | $ 48 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | (1) The Company and Summary of Significant Accounting Policies Description of Business ARCA biopharma, Inc. (the Company or ARCA), a Delaware corporation, is headquartered in Westminster, Colorado. The Company is a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases. The Company’s lead product candidate, Gencaro™ (bucindolol hydrochloride), is an investigational, pharmacologically unique beta-blocker and mild vasodilator that ARCA is developing for the potential treatment of patients with atrial fibrillation (AF) and chronic heart failure in patients with heart failure with reduced left ventricular ejection fraction (HFrEF). The Company is conducting a Phase 2B/Phase 3 clinical superiority trial, known as GENETIC-AF, in which the Company is evaluating Gencaro for the treatment of AF in HFrEF patients against TOPROL-XL (metoprolol succinate), a drug approved for treating HFrEF that is also prescribed, but not approved, for treating AF in patients with HFrEF. Enrollment in GENETIC-AF is limited to patients that possess the specific genotype that the Company believes enhances Gencaro’s potential therapeutic effects. The current development of Gencaro is, in part, based on a prospectively designed DNA substudy of adrenergic receptor polymorphisms in the BEST trial, a previous Phase 3 study of 2,708 HF patients. In the BEST trial, Gencaro showed evidence of potential efficacy in treating AF and in reducing mortality and hospitalizations in patients with this specific genotype. GENETIC-AF is an adaptive, seamless design Phase 2B/Phase 3, multi-center, randomized, double-blind, clinical superiority trial comparing the safety and efficacy of Gencaro against an active comparator, the beta-blocker TOPROL-XL (metoprolol succinate), that seeks to enroll a combined total of approximately 620 patients. Eligible patients will have HFrEF, a history of paroxysmal AF (episodes lasting 7 days or less) or persistent AF (episodes lasting more than 7 days and less than 1 year) in the past 6 months, and the beta-1 389 arginine homozygous genotype that the Company believes responds most favorably to Gencaro. The primary endpoint of the study is time to first event of symptomatic AF/atrial flutter (AFL), or all-cause mortality. The GENETIC-AF Data and Safety Monitoring Board (DSMB) will conduct a pre-specified interim analysis of study endpoints for efficacy, safety and futility to recommend whether or not the trial should proceed to Phase 3. The DSMB will make its recommendation based on a predictive probability analysis of certain trial data after a sufficient number of patients have evaluable endpoint data. A randomized patient has evaluable endpoint data either when they experience their first composite endpoint event, AF/AFL or all-cause mortality, or after completion of the 24-week primary endpoint follow up period. The DSMB interim analysis will focus on analyses of the AF/AFL endpoints in the trial using both clinical-based intermittent monitoring and device-based continuous monitoring techniques. Based on the results of the interim analysis, the DSMB may recommend that the trial proceed to Phase 3, the trial be completed as a Phase 2B study, or termination of the trial due to futility. ARCA, in collaboration with the GENETIC-AF Steering Committee, will determine the next steps for the trial based on the DSMB recommendation from this interim analysis and on the Company’s available financing. The Company randomized the 175th patient in the trial in March 2017. The Company projects that the outcome of the DSMB interim analysis and recommendation will be available in the third quarter of 2017. Should the DSMB recommend that the study continue to Phase 3, the trial would continue enrolling to a total of approximately 620 patients, subject to the Company obtaining sufficient financing to fund the Phase 3 portion of the trial. If the Company continues with the Phase 3 portion of the GENETIC-AF, it will need to raise additional capital to complete the Phase 3 portion of the GENETIC-AF clinical trial and submit for FDA approval. If the Company is unable to obtain additional funding or is unable to complete a strategic transaction, it may have to discontinue development activities on Gencaro or discontinue its operations. On January 27, 2009, the Company completed a business combination (the Merger) with Nuvelo, Inc. (Nuvelo). Immediately following the Merger, the Company changed its name from Nuvelo, Inc. to ARCA biopharma, Inc. Liquidity and Going Concern The Company devotes substantially all of its efforts towards obtaining regulatory approval and raising capital necessary to fund its operations and it is subject to a number of risks associated with clinical research and development, including dependence on key individuals, the development of and regulatory approval of commercially viable products, the need to raise adequate additional financing necessary to fund the development and commercialization of its products, and competition from larger companies. The Company has not generated revenue to date and has incurred substantial losses and negative cash flows from operations since its inception. The Company has historically funded its operations through issuances of common and preferred stock. In June 2015, the Company raised approximately $34.2 million in net proceeds to provide additional funds for the Phase 2B/3 GENETIC-AF trial and the Company’s ongoing operations. The Company is enrolling patients in the Phase 2B portion of the GENETIC-AF trial, and the Company believes that its current cash, cash equivalents and marketable securities will be sufficient to fund its operations, at its projected cost structure, through the end of 2017. In January 2017, the Company entered into a sales agreement with an agent to sell, from time to time, its common stock having an aggregate offering price of up to $7.3 million, in an “at the market offering.” The Company is not obligated to make any sales of its common stock, and we have not executed any significant sales through this facility. However, notwithstanding this sales agreement, in light of the significant uncertainties regarding clinical development timelines and costs for developing drugs such as Gencaro, the Company expects it will need to raise additional capital to finance the completion of GENETIC-AF and the Company’s future operations. If the Company is delayed in completing or is unable to complete additional funding and/or a strategic transaction, the Company may discontinue its development activities or operations. The Company’s liquidity, and its ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following: • progress of GENETIC-AF, including enrollment and any data that may become available; • the costs and timing for the potential additional clinical trials in order to gain possible regulatory approval for Gencaro; • the market price of the Company’s stock and the availability and cost of additional equity capital from existing and potential new investors; • the Company’s ability to retain the listing of its common stock on the Nasdaq Capital Market; • general economic and industry conditions affecting the availability and cost of capital; • the Company’s ability to control costs associated with its operations; • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and • the terms and conditions of the Company’s existing collaborative and licensing agreements. The sale of additional equity or convertible debt securities would likely result in substantial additional dilution to the Company’s stockholders. If the Company raises additional funds through the incurrence of indebtedness, the obligations related to such indebtedness would be senior to rights of holders of the Company’s capital stock and could contain covenants that would restrict the Company’s operations. The Company also cannot predict what consideration might be available, if any, to the Company or its stockholders, in connection with any strategic transaction. Should strategic alternatives or additional capital not be available to the Company, or not be available on acceptable terms, the Company may be unable to realize value from its assets and discharge its liabilities in the normal course of business which may, among other alternatives, cause the Company to further delay, substantially reduce or discontinue operational activities to conserve its cash resources. The significant uncertainties surrounding the clinical development timelines and costs and the need to raise a significant amount of capital raises substantial doubt about the Company’s ability to continue as a going concern from one year after the Company’s financial statements have been issued. The Company could delay or cancel certain significant planned expenditures related to the GENETIC-AF trial and/or implement cost reduction measures to conserve our cash balances; however, there is no assurance that those measures would be adequate to allow the Company to continue as a going concern for a period beyond one year from the issuance of these financial statements. These financial statements have been prepared with the assumption that the Company will continue as a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability of the Company to continue as a going concern. The Company may not be able to raise sufficient capital on acceptable terms, or at all, to continue development of Gencaro or to otherwise continue operations and may not be able to execute any strategic transaction. Basis of Presentation The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include all adjustments necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. Our management performed an evaluation of our activities through the date of filing of this Annual Report on Form 10-K, and the subsequent events are disclosed in Note 11. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU No. 2014-15), Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. . In April 2015, the FASB issued Accounting Standards Update No. 2015-05: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement In January 2016, FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the financial statements. Accounting Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company bases estimates on various assumptions that are believed to be reasonable under the circumstances. The Company believes significant judgment was involved in estimating the clinical trial accruals, and in estimating other accrued liabilities, stock-based compensation, and income taxes. Management is continually evaluating and updating these estimates, and it is possible that these estimates will change in the future or that actual results may differ from these estimates. Cash Equivalents Cash equivalents generally consist of money market funds and debt securities with maturities of 90 days or less at the time of purchase. The Company invests its excess cash in securities with strong ratings and has established guidelines relative to diversification and maturity with the objective of maintaining safety of principal and liquidity. Marketable Securities The Company has designated its marketable securities as of each balance sheet date as available-for-sale securities and account for them at their respective fair values. Marketable securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Marketable securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as current marketable securities in the accompanying balance sheets. Marketable securities that are not considered available for use in current operations are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying balance sheets. Securities that are classified as available-for-sale are measured at fair value, including accrued interest, with temporary unrealized gains and losses reported as a component of stockholders' equity until their disposition. The Company reviews all available-for-sale securities at each period end to determine if they remain available-for-sale based on our then current intent and ability to sell the security if it is required to do so. All of the Company’s marketable securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts, or foreign currency hedging arrangements. The Company maintains cash and cash equivalent balances in the form of bank demand deposits and money market fund accounts with financial institutions that management believes are creditworthy. Such balances may at times exceed the insured amount. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Cost includes expenditures for equipment, leasehold improvements, replacements, and renewals. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of property and equipment is depreciated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the life of the lease or the estimated useful life of the assets. Accrued Expenses As part of the process of preparing its financial statements, the Company is required to estimate accrued expenses. This process involves identifying services that third parties have performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for these services as of the balance sheet date. Examples of estimated accrued expenses include contract service fees, such as fees payable to contract manufacturers in connection with the production of materials related to the Company’s drug product, and professional service fees, such as attorneys, consultants, and clinical research organizations. The Company develops estimates of liabilities using its judgment based upon the facts and circumstances known at the time. Segments The Company operates in one segment. Management uses one measure of profitability and does not segment its business for internal reporting. Research and Development Research and development costs are expensed as incurred. These consist primarily of salaries, contract services, and supplies. Costs related to clinical trial and drug manufacturing activities are based upon estimates of the services received and related expenses incurred by contract research organizations, or CROs, clinical study sites, drug manufacturers, collaboration partners, laboratories, consultants, or otherwise. Related contracts vary significantly in length, and could be for a fixed amount, a variable amount based on actual costs incurred, capped at a certain limit, or for a combination of these elements. Activity levels are monitored through communications with the vendors, including detailed invoices and task completion review, analysis of expenses against budgeted amounts, and pre-approval of any changes in scope of the services to be performed. Certain significant vendors may also provide an estimate of costs incurred but not invoiced on a periodic basis. Expenses related to the CROs and clinical studies, as well as contract drug manufacturers, are primarily based on progress made against specified milestones or targets in each period. In accordance with certain research and development agreements, we are obligated to make certain upfront payments upon execution of the agreement. We record these upfront payments as prepaid research and development expenses, which are included in Other current assets or Other assets in the accompanying Balance Sheets. Such payments are recorded to research and development expense as services are performed. We evaluate on a quarterly basis whether events and circumstances have occurred that may indicate impairment of remaining prepaid research and development expenses. Stock-Based Compensation The Company’s stock-based compensation cost recognized is based on the estimated grant date fair value. The Company recognizes compensation costs for its stock-based awards on a straight-line basis over the requisite service period for the entire award, as adjusted for expected forfeitures. The Company recognizes compensation costs for its performance based stock-based awards over the performance period, once the performance condition is probable, and as adjusted for expected forfeitures. Income Taxes The current benefit for income taxes represents actual or estimated amounts payable or refundable on tax returns filed or to be filed each year. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. The measurement of deferred tax assets may be reduced by a valuation allowance based on judgmental assessment of available evidence if deemed more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a valuation allowance against all of its deferred tax assets, as management has concluded that it is more likely than not that the net deferred tax asset will not be realized through future taxable income, based primarily on the Company’s history of operating losses. The Company has not performed an Internal Revenue Code Section 382 limitation study. Depending on the outcome of such a study, the gross amount of net operating losses recognizable in future tax periods could be limited. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | (2) Net Loss Per Share The Company calculates basic earnings per share by dividing loss attributable to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share is computed by dividing loss attributable to common stockholders by the weighted average number of common shares outstanding during the period increased to include, if dilutive, the number of additional common shares that would have been outstanding if the potential common shares had been issued. The Company’s potentially dilutive shares include stock options, restricted stock units and warrants for common stock. Because the Company reported a net loss for the years ended December 31, 2016 and 2015, all potentially dilutive shares of common stock have been excluded from the computation of the dilutive net loss per share for all periods presented. Such potentially dilutive shares of common stock consist of the following: Years Ended December 31, 2016 2015 Potentially dilutive securities, excluded: Outstanding stock options 629,629 161,278 Unvested restricted stock units 30,739 62,359 Warrants to purchase common stock 3,686,894 3,739,948 4,347,262 3,963,585 |
Marketable Securities and Fair
Marketable Securities and Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities And Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value Disclosures | (3) Marketable Securities and Fair Value Disclosures Marketable securities consisted of the following as of December 31, 2016 (in thousands): December 31, 2016 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term available-for-sale securities: Corporate bonds $ 13,778 $ — $ (16 ) $ 13,762 Total $ 13,778 $ — $ (16 ) $ 13,762 Long-term available-for-sale securities: Corporate bonds $ 2,355 $ 3 $ (6 ) $ 2,352 Total $ 2,355 $ 3 $ (6 ) $ 2,352 The investments have been in an unrealized loss position for less than twelve months. Based upon the Company’s evaluation of all relevant factors, the Company believes that the decline in fair value of securities held at December 31, 2016 below cost is temporary, and the Company intends to retain its investment in these securities for a sufficient period of time to allow for recovery of the fair value. As of December 31, 2016, the amortized cost and estimated fair value of available-for-sale securities by contractual maturity were as follows (in thousands): Amortized Fair Cost Value Due in one year or less $ 13,778 $ 13,762 Due in one to two years 2,355 2,352 Total $ 16,133 $ 16,114 Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified into the following hierarchy: • Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets consist of money market investments. The Company does not have any Level 1 liabilities. • Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability. The Company’s Level 2 assets consist of corporate bonds and commercial paper securities. The Company does not have any Level 2 liabilities. • Level 3—Unobservable inputs for the asset or liability. The Company does not have any Level 3 assets or liabilities. The following table identifies the Company’s assets that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 December 31, 2016 Money market $ 7,672 $ 7,672 $ — $ — Corporate bonds 16,114 — 16,114 — Total $ 23,786 $ 7,672 $ 16,114 $ — December 31, 2015 Money market $ 38,728 $ 38,728 $ — $ — Total $ 38,728 $ 38,728 $ — $ — As of December 31, 2016 and 2015, the Company had $7.7 million and $38.7 million, respectively, of cash equivalents consisting of money market funds with maturities of 90 days or less. The Company has the ability to liquidate these investments without restriction. The Company determines fair value for these money market funds and equity securities with Level 1 inputs through quoted market prices. There were no transfers between any fair value hierarchy levels in 2016 or 2015. Fair Value of Other Financial Instruments The carrying amount of other financial instruments, including cash and accounts payable, approximated fair value due to their short maturities. As of December 31, 2016 and 2015, the Company did not have any debt outstanding. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | (4) Property and Equipment Property and equipment consist of the following (in thousands): Estimated Life December 31, 2016 December 31, 2015 Computer equipment 3 years $ 84 $ 90 Lab equipment 5 years 142 142 Furniture and fixtures 5 years 83 91 Computer software 3 years 85 84 Leasehold improvements Lesser of useful life or life of the lease 59 8 453 415 Accumulated depreciation and amortization (387 ) (387 ) Property and equipment, net $ 66 $ 28 For the years ended December 31, 2016 and 2015, depreciation and amortization expense was $24,000 and $19,000, respectively. |
Related Party Arrangements
Related Party Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | (5) Related Party Arrangements Transactions with the Company’s President and Chief Executive Officer The Company has entered into unrestricted research grants with its President and Chief Executive Officer’s academic research laboratory at the University of Colorado. Funding of any unrestricted research grants is contingent upon the Company’s financial condition, and can be deferred or terminated at the Company’s discretion. Total expense under these arrangements for the years ended December 31, 2016 and 2015 was $427,000 and $375,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (6) Commitments and Contingencies The Company has or is subject to the following commitments and contingencies: Employment Agreements The Company maintains employment agreements with several key executive employees. The agreements may be terminated at any time by the Company with or without cause upon written notice to the employee, and entitle the employee to wages in lieu of notice for periods not exceeding one calendar year from date of termination without cause or by the employee for good reason. Certain of these agreements also provide for payments to be made under certain conditions related to a change in control of the Company. Operating Lease On August 1, 2013 the Company entered into a lease agreement for approximately 5,300 square feet of office facilities in Westminster, Colorado which has served as the Company’s primary business office since October 1, 2013. Effective March 2, 2016, the lease was renewed for an additional 38 month term beginning October 1, 2016 and expiring on November 30, 2019. Below is a summary of the future minimum lease payments committed for the Company’s facility in Westminster, Colorado as of December 31, 2016 (in thousands): 2017 $ 83 2018 88 2019 83 Total future minimum lease payments $ 254 Rent expense under these leases for the years ended December 31, 2016 and 2015 was $81,000 and $81,000, respectively. Duke University In November 2013, the Company entered into a clinical research agreement with Duke University (Duke) to serve as the clinical research organization for the Company’s GENETIC-AF clinical study. Under the agreement the Company is responsible to pay Duke for their work managing certain aspects of the clinical study. Upon completion of the clinical study, the agreement will terminate. The agreement can be terminated earlier by the Company for any reason with 90 days written notice to Duke. In the event of an early termination, the Company and Duke would coordinate efforts for an orderly wind-down of the study, and the Company would be responsible to pay Duke for time and effort incurred through the date of termination and through the wind-down period. Cardiovascular Pharmacology and Engineering Consultants, LLC ARCA has licensed worldwide rights to Gencaro, including all preclinical and clinical data, from Cardiovascular Pharmacology and Engineering Consultants, LLC (CPEC), who has licensed rights in Gencaro from Bristol Myers Squib (BMS). CPEC is a licensing subsidiary of Indevus Pharmaceuticals Inc. (a wholly owned subsidiary of Endo Pharmaceuticals), holding ownership rights to certain clinical trial data of Gencaro. Under the terms of its license agreement with CPEC, the Company will incur milestone and royalty obligations upon the occurrence of certain events. If the FDA grants marketing approval for Gencaro, the license agreement states that the Company will owe CPEC a milestone payment of $8.0 million within six months after FDA approval. The license agreement states that a milestone payment of up to $5.0 million in the aggregate shall be paid upon regulatory marketing approval in Europe and Japan. The license agreement also states that the Company’s royalty obligation ranges from 12.5% to 25% of revenue from the related product based on achievement of specified product sales levels, including a 5% royalty that CPEC is obligated to pay under its original license agreement for Gencaro. The agreement states that the Company has the right to buy down the royalties to a range of 12.5% to 17% by making a payment to CPEC within six months of regulatory approval. |
Equity Financings and Warrants
Equity Financings and Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity Financings and Warrants | (7) Equity Financings and Warrants 2015 Equity Financing Private Investment in Public Entity (PIPE) Transaction On June 16, 2015, the Company sold an aggregate of 6,003,082 security units, made up of an aggregate 6,003,082 shares of the Company’s common stock and warrants to purchase an aggregate of 2,401,233 shares of the Company’s common stock, at a purchase price of $6.1635 per unit, for aggregate net proceeds of approximately $34.2 million. The warrants became exercisable on December 13, 2015, expire on June 16, 2022, and have an exercise price of $6.1012 per share. The warrants provide for cashless exercise and settlement in unregistered shares if there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the shares of common stock underlying the warrants at the time of exercise. The Company’s Registration Statement on Form S-3 registering these shares of common stock, including the shares of common stock underlying the warrants, issued in the transaction for public resale was declared effective by the Securities and Exchange Commission on July 20, 2015. Warrants Warrants to purchase shares of common stock were granted as part of various financing and business agreements. All outstanding warrants were recorded in additional paid-in capital at their estimated fair market value at the date of grant using a Black-Scholes option-pricing model. As of December 31, 2016, these warrants, by year of expiration, are summarized below: Year of Expiration Number of Warrants Weighted Average Exercise Price 2017 53,886 $ 42.46 2018 963,153 11.77 2019 224,323 15.73 2020 44,299 15.96 2022 2,401,233 6.10 3,686,894 $ 8.82 |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation | (8) Share-based Compensation Stock Plans The Company’s equity incentive plan, the 2013 Equity Incentive Plan The Equity Plan provides for the granting of stock options (including indexed options), restricted stock units, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, performance shares, performance units and deferred stock units. Under the Equity Plan, awards may be granted to employees, directors and consultants of ARCA, except for incentive stock options, which may be granted only to employees. As of December 31, 2016, options and awards for 651,227 shares were outstanding under the Equity Plan, and 592,430 shares were reserved for future awards. In general, the Equity Plan authorizes the grant of stock options that vest at rates set by the Board of Directors or the Compensation Committee thereof. Generally, stock options granted by ARCA under the equity incentive plans become exercisable ratably for a period of three to four years from the date of grant and have a maximum term of ten years. The exercise prices of stock options under the equity incentive plan generally meet the following criteria: the exercise price of incentive stock options must be at least 100% of the fair market value on the grant date and exercise price of options granted to 10% (or greater) stockholders must be at least 110% of the fair market value on the grant date. In conjunction with the adoption of the Equity Plan, the Company discontinued grants under its previous plan, the Amended and Restated ARCA biopharma, Inc. 2004 Equity Incentive Plan The Company granted options and awards for 487,700 and 52,801 shares of common stock in the years ended December 31, 2016 and 2015, respectively. The fair values of the majority of employee stock options granted in the years ended December 31, 2016 and 2015 were estimated at the date of grant using the Black-Scholes model with the following assumptions and had the following estimated weighted average grant date fair value per share: Years Ended December 31, 2016 2015 Expected term 5.7 years 5.8 years Expected volatility 72 % 89 % Risk-free interest rate 1.29 % 1.61 % Expected dividend yield 0 % 0 % Weighted-average grant date fair value per share $ 2.01 $ 3.57 A summary of ARCA’s stock option activities for the years ended December 31, 2016 and 2015, and related information as of December 31, 2016, is as follows: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options outstanding - December 31, 2014 152,584 $ 20.20 Granted 21,492 4.92 Exercised — — Forfeited and cancelled (12,798 ) 18.45 Options outstanding - December 31, 2015 161,278 $ 18.30 6.97 $ — Granted 487,700 3.22 Exercised — — Forfeited and cancelled (19,349 ) 28.70 Options outstanding - December 31, 2016 629,629 $ 6.30 8.86 $ 25 Options exercisable - December 31, 2016 181,518 $ 13.19 7.46 $ — Options vested and expected to vest - December 31, 2016 628,928 $ 6.30 8.86 $ 25 The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on our closing price as of December 31 of the respective year, which would have been received by the option holders had all the option holders with in-the-money options exercised as of that date. The total intrinsic value of options exercised for the years ended December 31, 2016 and 2015 was $0 and $0, respectively. As of December 31, 2016, the unrecognized compensation expense related to unvested options, excluding estimated forfeitures, was $932,000 which is expected to be recognized over a weighted average period of 1.3 years. The Company recognizes compensation costs for its share-based awards on a straight-line basis over the requisite service period for the entire award, as adjusted for expected forfeitures. Restricted Stock Units The Company began granting restricted stock units (RSUs) to employees during 2013 in conjunction with the adoption of the Equity Plan. The fair value of RSU awards is the closing price of the Company’s common stock on the date of grant and is recognized as compensation expense on a straight-line basis over the respective vesting period. The stock awards granted have a requisite service period between three and four years with annual vesting on the grant anniversary date. A summary of RSU activity for the years ended December 31, 2016 and 2015 is presented below: Restricted Stock Units Outstanding Number of Shares Weighted Average Grant Date Fair Value RSUs outstanding - December 31, 2014 67,274 $ 11.33 Granted 31,309 4.77 Vested and released (26,669 ) 10.75 Forfeited and cancelled (9,555 ) 10.90 RSUs outstanding - December 31, 2015 62,359 $ 8.36 Granted — — Vested and released (31,149 ) 8.85 Forfeited and cancelled (471 ) 4.69 RSUs outstanding - December 31, 2016 30,739 $ 7.91 As of December 31, 2016, the total unrecognized compensation cost related to unvested stock awards was approximately $143,000. This cost will be recognized on a straight-line basis over the next 1.2 years and will be adjusted for estimated forfeitures. Non-cash Stock-based Compensation For the years ended December 31, 2016 and 2015, the Company recognized the following non-cash, share-based compensation expense (in thousands): Years Ended December 31, 2016 2015 Research and development $ 167 $ 175 General and administrative 409 424 Total $ 576 $ 599 Stock-based compensation expense related to non-employees was negligible in 2016 and approximately $25,000 in 2015. ARCA did not recognize any tax benefit related to employee stock-based compensation cost as a result of the full valuation allowance on its net deferred tax assets. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | (9) Employee Benefit Plans The Company has a 401(k) plan and makes a matching contribution equal to 100% of the employee’s first 3% of the employee’s contributions and 50% of the employee’s next 2% of contributions. The Company adopted the plan in 2006 and contributed $119,000 and $122,000 for the years ended December 31, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | ( 10) Income Taxes Effective June 1, 2005, the Company changed from an S-Corporation to a C-Corporation. As an S-Corporation, the net operating loss carryforwards were distributed to the Company’s stockholders; such amounts were not significant. Since June 2005 through December 31, 2016, for federal income tax purposes, the Company has net operating loss carryforwards of approximately $139.7 million, and approximately $1.4 million of research and development credits that may be used to offset future taxable income. The Company’s net operating loss carryforwards will expire beginning 2025 through 2036. Utilization of net operating losses and tax credits, including those acquired as a result of the Merger, will be subject to an annual limitation due to ownership change limitations provided by Internal Revenue Code Section 382. The Company believes that an ownership change limitation as defined under Section 382 of the U.S. Internal Revenue Code occurred as a result of its various historical financing transactions, and its offering of common stock completed in June 2015. Future utilization of the federal net operating losses and tax credit carryforwards accumulated from June 2005 to the change in ownership date will be subject to annual limitations to offset future taxable income. The annual limitation may result in the expiration of the net operating losses and credits before utilization. As such, a portion of the Company’s net operating loss carryforwards may be limited. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due primarily to the Company’s history of operating losses, management is unable to conclude that it is more likely than not that the Company will realize the benefits of these deductible differences, and accordingly has provided a valuation allowance against the entire net deferred tax asset of approximately $54.8 million at December 31, 2016, reflecting an increase of approximately $6.2 million from December 31, 2015. The deferred tax assets are primarily comprised of net operating loss carryforwards and research and experimentation credit carryforwards. As of December 31, 2016, the Company has not performed an Internal Revenue Code Section 382 limitation study. Depending on the outcome of such a study, the gross amount of net operating losses recognizable in future tax periods could be limited. A limitation in the carryforwards would decrease the carrying amount of the gross amount of the net operating loss carryforwards, with a corresponding decrease in the valuation allowance recorded against these gross deferred tax assets. Income tax benefit attributable to our loss from operations before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 34% for 2016 and 2015, as a result of the following (in thousands): Years ended December 31, 2016 2015 U.S. federal income tax benefit at statutory rates $ (5,591 ) $ (3,891 ) State income tax benefit, net of federal benefit (502 ) (350 ) Research and experimentation credits (268 ) (181 ) Deferred tax asset adjustment 65 76 Other 137 188 Change in valuation allowance 6,159 4,158 $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards. The income tax effects of temporary differences and carryforwards that give rise to significant portions of the Company’s net deferred tax assets consisted of the following (in thousands): Years ended December 31, 2016 2015 Net operating loss carryforwards $ 51,758 $ 46,056 Charitable contribution carryforwards 552 454 Research and experimentation credits 1,440 1,172 Capitalized intangibles 781 746 Stock based compensation 193 162 Depreciation and amortization 6 2 Vacation accrual 35 28 Other 14 — Total deferred tax assets 54,779 48,620 Valuation allowance (54,779 ) (48,620 ) Net deferred tax assets $ — $ — Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. Thus, the Company’s open tax years extend back to 2009. The Company believes that its tax filing positions and deductions related to tax periods subject to examination will be sustained upon audit and does not anticipate any adjustment will result in a material adverse effect on the Company’s financial condition, result of operations, or cash flow. For the years ended December 31, 2016 and 2015, the Company has no reserve for uncertain tax positions. The Company does not expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within the subsequent twelve months. In the event the Company concludes it is subject to interest or penalties arising from uncertain tax positions, the Company will record interest and penalties as a component of other income and expense. No interest or penalties were recognized in the financial statements for the years ended December 31, 2016 and 2015. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | (11) Subsequent Event On January 11, 2017, the Company entered into a Capital on Demand TM Under the Sales Agreement, JonesTrading may sell the Shares by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made directly on or through The NASDAQ Capital Market, on any other existing trading market for the Common Stock or to or through a market maker. In addition, under the Sales Agreement, JonesTrading may sell the Shares by any other method permitted by law, including in negotiated transactions. The Company may instruct JonesTrading not to sell Shares if the sales cannot be effected at or above the price designated by the Company from time to time. The Company is not obligated to make any sales of the Shares under the Sales Agreement. The offering of Shares pursuant to the Sales Agreement will terminate upon the earlier of (a) the sale of all of the Shares subject to the Sales Agreement or (b) the termination of the Sales Agreement by JonesTrading or the Company, as permitted therein. The Company will pay JonesTrading a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of Shares and have agreed to provide JonesTrading with customary indemnification and contribution rights. The Company will also reimburse JonesTrading for certain specified expenses in connection with entering into the Sales Agreement. We have not executed any significant sales through this facility. |
The Company and Summary of Si18
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business ARCA biopharma, Inc. (the Company or ARCA), a Delaware corporation, is headquartered in Westminster, Colorado. The Company is a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases. The Company’s lead product candidate, Gencaro™ (bucindolol hydrochloride), is an investigational, pharmacologically unique beta-blocker and mild vasodilator that ARCA is developing for the potential treatment of patients with atrial fibrillation (AF) and chronic heart failure in patients with heart failure with reduced left ventricular ejection fraction (HFrEF). The Company is conducting a Phase 2B/Phase 3 clinical superiority trial, known as GENETIC-AF, in which the Company is evaluating Gencaro for the treatment of AF in HFrEF patients against TOPROL-XL (metoprolol succinate), a drug approved for treating HFrEF that is also prescribed, but not approved, for treating AF in patients with HFrEF. Enrollment in GENETIC-AF is limited to patients that possess the specific genotype that the Company believes enhances Gencaro’s potential therapeutic effects. The current development of Gencaro is, in part, based on a prospectively designed DNA substudy of adrenergic receptor polymorphisms in the BEST trial, a previous Phase 3 study of 2,708 HF patients. In the BEST trial, Gencaro showed evidence of potential efficacy in treating AF and in reducing mortality and hospitalizations in patients with this specific genotype. GENETIC-AF is an adaptive, seamless design Phase 2B/Phase 3, multi-center, randomized, double-blind, clinical superiority trial comparing the safety and efficacy of Gencaro against an active comparator, the beta-blocker TOPROL-XL (metoprolol succinate), that seeks to enroll a combined total of approximately 620 patients. Eligible patients will have HFrEF, a history of paroxysmal AF (episodes lasting 7 days or less) or persistent AF (episodes lasting more than 7 days and less than 1 year) in the past 6 months, and the beta-1 389 arginine homozygous genotype that the Company believes responds most favorably to Gencaro. The primary endpoint of the study is time to first event of symptomatic AF/atrial flutter (AFL), or all-cause mortality. The GENETIC-AF Data and Safety Monitoring Board (DSMB) will conduct a pre-specified interim analysis of study endpoints for efficacy, safety and futility to recommend whether or not the trial should proceed to Phase 3. The DSMB will make its recommendation based on a predictive probability analysis of certain trial data after a sufficient number of patients have evaluable endpoint data. A randomized patient has evaluable endpoint data either when they experience their first composite endpoint event, AF/AFL or all-cause mortality, or after completion of the 24-week primary endpoint follow up period. The DSMB interim analysis will focus on analyses of the AF/AFL endpoints in the trial using both clinical-based intermittent monitoring and device-based continuous monitoring techniques. Based on the results of the interim analysis, the DSMB may recommend that the trial proceed to Phase 3, the trial be completed as a Phase 2B study, or termination of the trial due to futility. ARCA, in collaboration with the GENETIC-AF Steering Committee, will determine the next steps for the trial based on the DSMB recommendation from this interim analysis and on the Company’s available financing. The Company randomized the 175th patient in the trial in March 2017. The Company projects that the outcome of the DSMB interim analysis and recommendation will be available in the third quarter of 2017. Should the DSMB recommend that the study continue to Phase 3, the trial would continue enrolling to a total of approximately 620 patients, subject to the Company obtaining sufficient financing to fund the Phase 3 portion of the trial. If the Company continues with the Phase 3 portion of the GENETIC-AF, it will need to raise additional capital to complete the Phase 3 portion of the GENETIC-AF clinical trial and submit for FDA approval. If the Company is unable to obtain additional funding or is unable to complete a strategic transaction, it may have to discontinue development activities on Gencaro or discontinue its operations. On January 27, 2009, the Company completed a business combination (the Merger) with Nuvelo, Inc. (Nuvelo). Immediately following the Merger, the Company changed its name from Nuvelo, Inc. to ARCA biopharma, Inc. |
Liquidity and Going Concern | Liquidity and Going Concern The Company devotes substantially all of its efforts towards obtaining regulatory approval and raising capital necessary to fund its operations and it is subject to a number of risks associated with clinical research and development, including dependence on key individuals, the development of and regulatory approval of commercially viable products, the need to raise adequate additional financing necessary to fund the development and commercialization of its products, and competition from larger companies. The Company has not generated revenue to date and has incurred substantial losses and negative cash flows from operations since its inception. The Company has historically funded its operations through issuances of common and preferred stock. In June 2015, the Company raised approximately $34.2 million in net proceeds to provide additional funds for the Phase 2B/3 GENETIC-AF trial and the Company’s ongoing operations. The Company is enrolling patients in the Phase 2B portion of the GENETIC-AF trial, and the Company believes that its current cash, cash equivalents and marketable securities will be sufficient to fund its operations, at its projected cost structure, through the end of 2017. In January 2017, the Company entered into a sales agreement with an agent to sell, from time to time, its common stock having an aggregate offering price of up to $7.3 million, in an “at the market offering.” The Company is not obligated to make any sales of its common stock, and we have not executed any significant sales through this facility. However, notwithstanding this sales agreement, in light of the significant uncertainties regarding clinical development timelines and costs for developing drugs such as Gencaro, the Company expects it will need to raise additional capital to finance the completion of GENETIC-AF and the Company’s future operations. If the Company is delayed in completing or is unable to complete additional funding and/or a strategic transaction, the Company may discontinue its development activities or operations. The Company’s liquidity, and its ability to raise additional capital or complete any strategic transaction, depends on a number of factors, including, but not limited to, the following: • progress of GENETIC-AF, including enrollment and any data that may become available; • the costs and timing for the potential additional clinical trials in order to gain possible regulatory approval for Gencaro; • the market price of the Company’s stock and the availability and cost of additional equity capital from existing and potential new investors; • the Company’s ability to retain the listing of its common stock on the Nasdaq Capital Market; • general economic and industry conditions affecting the availability and cost of capital; • the Company’s ability to control costs associated with its operations; • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and • the terms and conditions of the Company’s existing collaborative and licensing agreements. The sale of additional equity or convertible debt securities would likely result in substantial additional dilution to the Company’s stockholders. If the Company raises additional funds through the incurrence of indebtedness, the obligations related to such indebtedness would be senior to rights of holders of the Company’s capital stock and could contain covenants that would restrict the Company’s operations. The Company also cannot predict what consideration might be available, if any, to the Company or its stockholders, in connection with any strategic transaction. Should strategic alternatives or additional capital not be available to the Company, or not be available on acceptable terms, the Company may be unable to realize value from its assets and discharge its liabilities in the normal course of business which may, among other alternatives, cause the Company to further delay, substantially reduce or discontinue operational activities to conserve its cash resources. The significant uncertainties surrounding the clinical development timelines and costs and the need to raise a significant amount of capital raises substantial doubt about the Company’s ability to continue as a going concern from one year after the Company’s financial statements have been issued. The Company could delay or cancel certain significant planned expenditures related to the GENETIC-AF trial and/or implement cost reduction measures to conserve our cash balances; however, there is no assurance that those measures would be adequate to allow the Company to continue as a going concern for a period beyond one year from the issuance of these financial statements. These financial statements have been prepared with the assumption that the Company will continue as a going concern and will be able to realize its assets and discharge its liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability of the Company to continue as a going concern. The Company may not be able to raise sufficient capital on acceptable terms, or at all, to continue development of Gencaro or to otherwise continue operations and may not be able to execute any strategic transaction. |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include all adjustments necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. Our management performed an evaluation of our activities through the date of filing of this Annual Report on Form 10-K, and the subsequent events are disclosed in Note 11. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU No. 2014-15), Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. . In April 2015, the FASB issued Accounting Standards Update No. 2015-05: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement In January 2016, FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the financial statements. |
Accounting Estimates in the Preparation of Financial Statements | Accounting Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company bases estimates on various assumptions that are believed to be reasonable under the circumstances. The Company believes significant judgment was involved in estimating the clinical trial accruals, and in estimating other accrued liabilities, stock-based compensation, and income taxes. Management is continually evaluating and updating these estimates, and it is possible that these estimates will change in the future or that actual results may differ from these estimates. |
Cash Equivalents | Cash Equivalents Cash equivalents generally consist of money market funds and debt securities with maturities of 90 days or less at the time of purchase. The Company invests its excess cash in securities with strong ratings and has established guidelines relative to diversification and maturity with the objective of maintaining safety of principal and liquidity. |
Marketable Securities | Marketable Securities The Company has designated its marketable securities as of each balance sheet date as available-for-sale securities and account for them at their respective fair values. Marketable securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Marketable securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as current marketable securities in the accompanying balance sheets. Marketable securities that are not considered available for use in current operations are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying balance sheets. Securities that are classified as available-for-sale are measured at fair value, including accrued interest, with temporary unrealized gains and losses reported as a component of stockholders' equity until their disposition. The Company reviews all available-for-sale securities at each period end to determine if they remain available-for-sale based on our then current intent and ability to sell the security if it is required to do so. All of the Company’s marketable securities are subject to a periodic impairment review. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts, or foreign currency hedging arrangements. The Company maintains cash and cash equivalent balances in the form of bank demand deposits and money market fund accounts with financial institutions that management believes are creditworthy. Such balances may at times exceed the insured amount. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Cost includes expenditures for equipment, leasehold improvements, replacements, and renewals. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of property and equipment is depreciated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the life of the lease or the estimated useful life of the assets. |
Accrued Expenses | Accrued Expenses As part of the process of preparing its financial statements, the Company is required to estimate accrued expenses. This process involves identifying services that third parties have performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for these services as of the balance sheet date. Examples of estimated accrued expenses include contract service fees, such as fees payable to contract manufacturers in connection with the production of materials related to the Company’s drug product, and professional service fees, such as attorneys, consultants, and clinical research organizations. The Company develops estimates of liabilities using its judgment based upon the facts and circumstances known at the time. |
Segments | Segments The Company operates in one segment. Management uses one measure of profitability and does not segment its business for internal reporting. |
Research and Development | Research and Development Research and development costs are expensed as incurred. These consist primarily of salaries, contract services, and supplies. Costs related to clinical trial and drug manufacturing activities are based upon estimates of the services received and related expenses incurred by contract research organizations, or CROs, clinical study sites, drug manufacturers, collaboration partners, laboratories, consultants, or otherwise. Related contracts vary significantly in length, and could be for a fixed amount, a variable amount based on actual costs incurred, capped at a certain limit, or for a combination of these elements. Activity levels are monitored through communications with the vendors, including detailed invoices and task completion review, analysis of expenses against budgeted amounts, and pre-approval of any changes in scope of the services to be performed. Certain significant vendors may also provide an estimate of costs incurred but not invoiced on a periodic basis. Expenses related to the CROs and clinical studies, as well as contract drug manufacturers, are primarily based on progress made against specified milestones or targets in each period. In accordance with certain research and development agreements, we are obligated to make certain upfront payments upon execution of the agreement. We record these upfront payments as prepaid research and development expenses, which are included in Other current assets or Other assets in the accompanying Balance Sheets. Such payments are recorded to research and development expense as services are performed. We evaluate on a quarterly basis whether events and circumstances have occurred that may indicate impairment of remaining prepaid research and development expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation cost recognized is based on the estimated grant date fair value. The Company recognizes compensation costs for its stock-based awards on a straight-line basis over the requisite service period for the entire award, as adjusted for expected forfeitures. The Company recognizes compensation costs for its performance based stock-based awards over the performance period, once the performance condition is probable, and as adjusted for expected forfeitures. |
Income Taxes | Income Taxes The current benefit for income taxes represents actual or estimated amounts payable or refundable on tax returns filed or to be filed each year. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. The measurement of deferred tax assets may be reduced by a valuation allowance based on judgmental assessment of available evidence if deemed more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a valuation allowance against all of its deferred tax assets, as management has concluded that it is more likely than not that the net deferred tax asset will not be realized through future taxable income, based primarily on the Company’s history of operating losses. The Company has not performed an Internal Revenue Code Section 382 limitation study. Depending on the outcome of such a study, the gross amount of net operating losses recognizable in future tax periods could be limited. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Potentially Dilutive Shares of Common Stock | Because the Company reported a net loss for the years ended December 31, 2016 and 2015, all potentially dilutive shares of common stock have been excluded from the computation of the dilutive net loss per share for all periods presented. Such potentially dilutive shares of common stock consist of the following: Years Ended December 31, 2016 2015 Potentially dilutive securities, excluded: Outstanding stock options 629,629 161,278 Unvested restricted stock units 30,739 62,359 Warrants to purchase common stock 3,686,894 3,739,948 4,347,262 3,963,585 |
Marketable Securities and Fai20
Marketable Securities and Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities And Fair Value Disclosures [Abstract] | |
Summary of Marketable Securities | Marketable securities consisted of the following as of December 31, 2016 (in thousands): December 31, 2016 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short-term available-for-sale securities: Corporate bonds $ 13,778 $ — $ (16 ) $ 13,762 Total $ 13,778 $ — $ (16 ) $ 13,762 Long-term available-for-sale securities: Corporate bonds $ 2,355 $ 3 $ (6 ) $ 2,352 Total $ 2,355 $ 3 $ (6 ) $ 2,352 |
Summary of Amortized Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity | As of December 31, 2016, the amortized cost and estimated fair value of available-for-sale securities by contractual maturity were as follows (in thousands): Amortized Fair Cost Value Due in one year or less $ 13,778 $ 13,762 Due in one to two years 2,355 2,352 Total $ 16,133 $ 16,114 |
Summary of Assets Measured at Fair Value on Recurring Basis | The following table identifies the Company’s assets that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 December 31, 2016 Money market $ 7,672 $ 7,672 $ — $ — Corporate bonds 16,114 — 16,114 — Total $ 23,786 $ 7,672 $ 16,114 $ — December 31, 2015 Money market $ 38,728 $ 38,728 $ — $ — Total $ 38,728 $ 38,728 $ — $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consist of the following (in thousands): Estimated Life December 31, 2016 December 31, 2015 Computer equipment 3 years $ 84 $ 90 Lab equipment 5 years 142 142 Furniture and fixtures 5 years 83 91 Computer software 3 years 85 84 Leasehold improvements Lesser of useful life or life of the lease 59 8 453 415 Accumulated depreciation and amortization (387 ) (387 ) Property and equipment, net $ 66 $ 28 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Below is a summary of the future minimum lease payments committed for the Company’s facility in Westminster, Colorado as of December 31, 2016 (in thousands): 2017 $ 83 2018 88 2019 83 Total future minimum lease payments $ 254 |
Equity Financings and Warrants
Equity Financings and Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summary of Warrants by Year of Expiration | As of December 31, 2016, these warrants, by year of expiration, are summarized below: Year of Expiration Number of Warrants Weighted Average Exercise Price 2017 53,886 $ 42.46 2018 963,153 11.77 2019 224,323 15.73 2020 44,299 15.96 2022 2,401,233 6.10 3,686,894 $ 8.82 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Estimated Weighted Average Grant Date Fair Value per Share | The Company granted options and awards for 487,700 and 52,801 shares of common stock in the years ended December 31, 2016 and 2015, respectively. The fair values of the majority of employee stock options granted in the years ended December 31, 2016 and 2015 were estimated at the date of grant using the Black-Scholes model with the following assumptions and had the following estimated weighted average grant date fair value per share: Years Ended December 31, 2016 2015 Expected term 5.7 years 5.8 years Expected volatility 72 % 89 % Risk-free interest rate 1.29 % 1.61 % Expected dividend yield 0 % 0 % Weighted-average grant date fair value per share $ 2.01 $ 3.57 |
Summary of Stock Option Activities | A summary of ARCA’s stock option activities for the years ended December 31, 2016 and 2015, and related information as of December 31, 2016, is as follows: Options Outstanding Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options outstanding - December 31, 2014 152,584 $ 20.20 Granted 21,492 4.92 Exercised — — Forfeited and cancelled (12,798 ) 18.45 Options outstanding - December 31, 2015 161,278 $ 18.30 6.97 $ — Granted 487,700 3.22 Exercised — — Forfeited and cancelled (19,349 ) 28.70 Options outstanding - December 31, 2016 629,629 $ 6.30 8.86 $ 25 Options exercisable - December 31, 2016 181,518 $ 13.19 7.46 $ — Options vested and expected to vest - December 31, 2016 628,928 $ 6.30 8.86 $ 25 |
Summary of RSU Activity | A summary of RSU activity for the years ended December 31, 2016 and 2015 is presented below: Restricted Stock Units Outstanding Number of Shares Weighted Average Grant Date Fair Value RSUs outstanding - December 31, 2014 67,274 $ 11.33 Granted 31,309 4.77 Vested and released (26,669 ) 10.75 Forfeited and cancelled (9,555 ) 10.90 RSUs outstanding - December 31, 2015 62,359 $ 8.36 Granted — — Vested and released (31,149 ) 8.85 Forfeited and cancelled (471 ) 4.69 RSUs outstanding - December 31, 2016 30,739 $ 7.91 |
Summary of Non-cash, Share-based Compensation Expense | For the years ended December 31, 2016 and 2015, the Company recognized the following non-cash, share-based compensation expense (in thousands): Years Ended December 31, 2016 2015 Research and development $ 167 $ 175 General and administrative 409 424 Total $ 576 $ 599 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Benefit Attributable to Our Loss from Operations | Income tax benefit attributable to our loss from operations before income taxes differs from the amounts computed by applying the U.S. federal statutory income tax rate of 34% for 2016 and 2015, as a result of the following (in thousands): Years ended December 31, 2016 2015 U.S. federal income tax benefit at statutory rates $ (5,591 ) $ (3,891 ) State income tax benefit, net of federal benefit (502 ) (350 ) Research and experimentation credits (268 ) (181 ) Deferred tax asset adjustment 65 76 Other 137 188 Change in valuation allowance 6,159 4,158 $ — $ — |
Net Deferred Tax Assets | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards. The income tax effects of temporary differences and carryforwards that give rise to significant portions of the Company’s net deferred tax assets consisted of the following (in thousands): Years ended December 31, 2016 2015 Net operating loss carryforwards $ 51,758 $ 46,056 Charitable contribution carryforwards 552 454 Research and experimentation credits 1,440 1,172 Capitalized intangibles 781 746 Stock based compensation 193 162 Depreciation and amortization 6 2 Vacation accrual 35 28 Other 14 — Total deferred tax assets 54,779 48,620 Valuation allowance (54,779 ) (48,620 ) Net deferred tax assets $ — $ — |
The Company and Summary of Si26
The Company and Summary of Significant Accounting Policies (Details Textual) | Jan. 11, 2017USD ($) | Jun. 16, 2015USD ($) | Dec. 31, 2016USD ($)PatientsSegmentshares | Dec. 31, 2015USD ($)shares |
Company And Summary Of Significant Accounting Policies Table [Line Items] | ||||
Date of completion of business combination with Nuvelo | Jan. 27, 2009 | |||
Revenues | $ 0 | |||
Proceeds from sale of common stock | $ 37,000,000 | |||
Excess tax benefits from share-based payments | $ 0 | $ 0 | ||
Number of shares withhold to satisfy statutory income tax withholding obligations | shares | 0 | 0 | ||
Concentrations of credit risk | $ 0 | |||
Number of segments | Segment | 1 | |||
Private Investment In Public Entity Transaction | ||||
Company And Summary Of Significant Accounting Policies Table [Line Items] | ||||
Proceeds from the issuance of security units | $ 34,200,000 | |||
At the Market Offering under Sales Agreement | Subsequent Event | ||||
Company And Summary Of Significant Accounting Policies Table [Line Items] | ||||
Aggregate offering price of common stock authorized | $ 7,300,000 | |||
Proceeds from sale of common stock | $ 0 | |||
Phase 3 | BEST Trial | ||||
Company And Summary Of Significant Accounting Policies Table [Line Items] | ||||
Number of patients | Patients | 2,708 | |||
Phase 2B/Phase 3 | GENETIC-AF Trial | ||||
Company And Summary Of Significant Accounting Policies Table [Line Items] | ||||
Number of patients company plans to enroll | Patients | 620 | |||
Trial endpoint, term | 168 days |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Potentially Dilutive Shares of Common Stock (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,347,262 | 3,963,585 |
Outstanding stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 629,629 | 161,278 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 30,739 | 62,359 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,686,894 | 3,739,948 |
Marketable Securities and Fai28
Marketable Securities and Fair Value Disclosures - Summary of Marketable securities (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Amortized Cost | $ 16,133 |
Fair Value | 16,114 |
Short-term available-for-sale securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Amortized Cost | 13,778 |
Gross Unrealized Losses | (16) |
Fair Value | 13,762 |
Short-term available-for-sale securities | Corporate bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Amortized Cost | 13,778 |
Gross Unrealized Losses | (16) |
Fair Value | 13,762 |
Long-term available-for-sale securities | |
Schedule of Available-for-sale Securities [Line Items] | |
Amortized Cost | 2,355 |
Gross Unrealized Gains | 3 |
Gross Unrealized Losses | (6) |
Fair Value | 2,352 |
Long-term available-for-sale securities | Corporate bonds | |
Schedule of Available-for-sale Securities [Line Items] | |
Amortized Cost | 2,355 |
Gross Unrealized Gains | 3 |
Gross Unrealized Losses | (6) |
Fair Value | $ 2,352 |
Marketable Securities and Fai29
Marketable Securities and Fair Value Disclosures - Summary of Amortized Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Investments Debt And Equity Securities [Abstract] | |
Due in one year or less, Amortized Cost | $ 13,778 |
Due in one to two years, Amortized Cost | 2,355 |
Amortized Cost | 16,133 |
Due in one year or less, Fair Value | 13,762 |
Due in one to two years, Fair Value | 2,352 |
Fair Value | $ 16,114 |
Marketable Securities and Fai30
Marketable Securities and Fair Value Disclosures - Summary of Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 23,786 | $ 38,728 |
Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 16,114 | |
Money market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 7,672 | 38,728 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 7,672 | 38,728 |
Level 1 | Money market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 7,672 | $ 38,728 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 16,114 | |
Level 2 | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 16,114 |
Marketable Securities and Fai31
Marketable Securities and Fair Value Disclosures (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers of assets between fair value hierarchy levels | $ 0 | $ 0 |
Debt outstanding | 0 | 0 |
Fair Value Measurements, Recurring | Level 1 | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents consisting of money market funds | $ 7,700,000 | $ 38,700,000 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Line Items] | ||
Property and Equipment, Gross | $ 453 | $ 415 |
Accumulated depreciation and amortization | (387) | (387) |
Property and equipment, net | $ 66 | 28 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Estimated Life | 3 years | |
Property and Equipment, Gross | $ 84 | 90 |
Lab Equipment | ||
Property Plant And Equipment [Line Items] | ||
Estimated Life | 5 years | |
Property and Equipment, Gross | $ 142 | 142 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Estimated Life | 5 years | |
Property and Equipment, Gross | $ 83 | 91 |
Computer Software | ||
Property Plant And Equipment [Line Items] | ||
Estimated Life | 3 years | |
Property and Equipment, Gross | $ 85 | 84 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Estimated Life | Lesser of useful life or life of the lease | |
Property and Equipment, Gross | $ 59 | $ 8 |
Property and Equipment (Details
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense | $ 24 | $ 19 |
Related Party Arrangements (Det
Related Party Arrangements (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Chief Executive Officer | Research Grants | ||
Related Party Transaction [Line Items] | ||
Total expense | $ 427 | $ 375 |
Commitments and Contingencies35
Commitments and Contingencies (Details Textual) $ in Thousands | Mar. 02, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 01, 2013ft² |
Commitments And Contingencies [Line Items] | ||||
Area of office facilities taken on lease | ft² | 5,300 | |||
Additional operating lease term | 38 months | |||
Lease renewal start date | Oct. 1, 2016 | |||
Lease expiration date | Nov. 30, 2019 | |||
Rent expense | $ 81 | $ 81 | ||
Royalty buy down due period | 6 months | |||
Minimum | ||||
Commitments And Contingencies [Line Items] | ||||
Percentage of royalty obligation | 12.50% | |||
Percentage of range of royalties that can be bought down | 12.50% | |||
Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Percentage of royalty obligation | 25.00% | |||
Percentage of range of royalties that can be bought down | 17.00% | |||
Clinical Research Agreement with Duke University | ||||
Commitments And Contingencies [Line Items] | ||||
Agreement termination notice period | 90 days | |||
Upon Food and Drug Administration Approval | ||||
Commitments And Contingencies [Line Items] | ||||
Expected milestone payments due upon approval | $ 8,000 | |||
Upon Regulatory Marketing Approval | ||||
Commitments And Contingencies [Line Items] | ||||
Expected milestone payments due upon approval | $ 5,000 | |||
CPEC | ||||
Commitments And Contingencies [Line Items] | ||||
Percentage of royalty obligation | 5.00% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,017 | $ 83 |
2,018 | 88 |
2,019 | 83 |
Total future minimum lease payments | $ 254 |
Equity Financings and Warrant37
Equity Financings and Warrants (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Jun. 16, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Equity Financing And Warrants [Line Items] | |||
Common stock, shares issued | 9,082,366 | 9,051,217 | |
Private Investment In Public Entity Transaction | |||
Equity Financing And Warrants [Line Items] | |||
Common stock, shares issued | 6,003,082 | ||
Warrants available to purchase additional commons shares | 2,401,233 | ||
Purchase price for common stock unit | $ 6.1635 | ||
Proceeds from the issuance of security units | $ 34.2 | ||
Warrants exercisable date | Dec. 13, 2015 | ||
Warrants were exercisable upon issuance, expiry date | Jun. 16, 2022 | ||
Warrant price per share | $ 6.1012 | ||
Private Investment In Public Entity Transaction | Security Units | |||
Equity Financing And Warrants [Line Items] | |||
Common stock, shares issued | 6,003,082 |
Equity Financings and Warrant38
Equity Financings and Warrants - Summary of Warrants by Year of Expiration (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | shares | 3,686,894 |
Weighted Average Exercise Price | $ / shares | $ 8.82 |
2,017 | |
Class Of Warrant Or Right [Line Items] | |
Year of Expiration | 2,017 |
Number of Warrants | shares | 53,886 |
Weighted Average Exercise Price | $ / shares | $ 42.46 |
2,018 | |
Class Of Warrant Or Right [Line Items] | |
Year of Expiration | 2,018 |
Number of Warrants | shares | 963,153 |
Weighted Average Exercise Price | $ / shares | $ 11.77 |
2,019 | |
Class Of Warrant Or Right [Line Items] | |
Year of Expiration | 2,019 |
Number of Warrants | shares | 224,323 |
Weighted Average Exercise Price | $ / shares | $ 15.73 |
2,020 | |
Class Of Warrant Or Right [Line Items] | |
Year of Expiration | 2,020 |
Number of Warrants | shares | 44,299 |
Weighted Average Exercise Price | $ / shares | $ 15.96 |
2,022 | |
Class Of Warrant Or Right [Line Items] | |
Year of Expiration | 2,022 |
Number of Warrants | shares | 2,401,233 |
Weighted Average Exercise Price | $ / shares | $ 6.10 |
Share-based Compensation (Detai
Share-based Compensation (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares outstanding under Equity plan | 629,629 | 161,278 | 152,584 | |
Stock options award, expiration | 10 years | |||
Weighted Average exercise Price of Options Outstanding | $ 6.30 | $ 18.30 | $ 20.20 | |
Total intrinsic value of options exercised | $ 0 | $ 0 | ||
Stock-based compensation expense related to non-employees | $ 25,000 | |||
Employee Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation expense related to unvested options | $ 932,000 | |||
Maturity period of weighted average period of compensation expenses | 1 year 3 months 18 days | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Maturity period of weighted average period of compensation expenses | 1 year 2 months 12 days | |||
Unrecognized compensation cost related to unvested stock awards | $ 143,000 | |||
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options award, vesting period | 3 years | |||
Percentage holding for stock options exercise price | 10.00% | |||
Minimum | Incentive Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of exercise price of stock option | 100.00% | |||
Minimum | Incentive Stock Option | Stockholders | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of exercise price of stock option | 110.00% | |||
Minimum | Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Restricted Stock Units award, requisite service period | 3 years | |||
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options award, vesting period | 4 years | |||
Maximum | Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Restricted Stock Units award, requisite service period | 4 years | |||
2013 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Increase in number of shares reserve for issuance under amended Equity Plan | 1,000,000 | |||
Number of shares issuable under Equity plan | 1,321,428 | |||
Number of shares outstanding under Equity plan | 651,227 | |||
Shares reserved for future | 592,430 | |||
Options and awards granted | 487,700 | 52,801 | ||
Two Thousand And Four Stock Option Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares outstanding under Equity plan | 5,643 | |||
Weighted Average exercise Price of Options Outstanding | $ 102.64 | |||
Other Stock Option Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares outstanding under Equity plan | 3,498 | |||
Weighted Average exercise Price of Options Outstanding | $ 157.35 |
Share-based Compensation - Esti
Share-based Compensation - Estimated Weighted Average Grant Date Fair Value Per Share (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Estimated weighted average grant date fair value per share | ||
Expected term | 5 years 8 months 12 days | 5 years 9 months 18 days |
Expected volatility | 72.00% | 89.00% |
Risk-free interest rate | 1.29% | 1.61% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value per share | $ 2.01 | $ 3.57 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Stock Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Stock Options | ||
Number of Options, Options outstanding, beginning of period | 161,278 | 152,584 |
Number of Options, Granted | 487,700 | 21,492 |
Number of Options, Forfeited and cancelled | (19,349) | (12,798) |
Number of Options, Options outstanding, end of period | 629,629 | 161,278 |
Number of Options, Options exercisable, end of period | 181,518 | |
Number of Options, Options vested and expected to vest | 628,928 | |
Stock Options, Weighted Average Exercise Price | ||
Weighted Average Exercise Price, Options outstanding, beginning of period | $ 18.30 | $ 20.20 |
Weighted Average Exercise Price, Granted | 3.22 | 4.92 |
Weighted Average Exercise Price, Forfeited and cancelled | 28.70 | 18.45 |
Weighted Average Exercise Price, Options outstanding, end of period | 6.30 | $ 18.30 |
Weighted Average Exercise Price, Options exercisable, end of period | 13.19 | |
Weighted Average Exercise Price, Options vested and expected to vest, end of period | $ 6.30 | |
Stock Options, Weighted Average Remaining Contractual Term | ||
Weighted Average Remaining Contractual Term (in years), Options outstanding | 8 years 10 months 10 days | 6 years 11 months 19 days |
Weighted Average Remaining Contractual Term (in years), Options exercisable | 7 years 5 months 16 days | |
Weighted Average Remaining Contractual Term (in years), Options vested and expected to vest | 8 years 10 months 10 days | |
Share Options, Aggregate Intrinsic Value | ||
Aggregate intrinsic value, Options Outstanding, end of period | $ 25 | |
Aggregate intrinsic value, Options vested and expected to vest, end of period | $ 25 |
Share-based Compensation - Su42
Share-based Compensation - Summary of RSU Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Stock Awards, Number of Shares | ||
Restricted stock units outstanding, beginning of period | 62,359 | 67,274 |
Granted | 31,309 | |
Vested and released | (31,149) | (26,669) |
Forfeited and cancelled | (471) | (9,555) |
Restricted stock units outstanding, end of period | 30,739 | 62,359 |
Restricted Stock Awards, Weighted Average Grant Date Fair Value | ||
Restricted stock units outstanding, beginning of period | $ 8.36 | $ 11.33 |
Granted | 4.77 | |
Vested and released | 8.85 | 10.75 |
Forfeited and cancelled | 4.69 | 10.90 |
Restricted stock units outstanding, end of period | $ 7.91 | $ 8.36 |
Share-based Compensation - Su43
Share-based Compensation - Summary of Non-cash, Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total expenses | $ 576 | $ 599 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total expenses | 167 | 175 |
General and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total expenses | $ 409 | $ 424 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contribution | matching contribution equal to 100% of the employee’s first 3% of the employee’s contributions and 50% of the employee’s next 2% of contributions. | |
Company's contribution | $ 119 | $ 122 |
First 3% of pay contributed | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Benefit Plan, Percentage of Match | 100.00% | |
Employer matching contribution percentage | 3.00% | |
Next 2% of pay contributed | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Benefit Plan, Percentage of Match | 50.00% | |
Employer matching contribution percentage | 2.00% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||
Net operating loss carryforwards | $ 139,700,000 | |
Tax Credit Carryforward, Description | The Company’s net operating loss carryforwards will expire beginning 2025 through 2036. | |
Valuation allowance | $ 54,779,000 | $ 48,620,000 |
Increase net deferred tax asset | $ 6,200,000 | |
Federal statutory income tax rate | 34.00% | 34.00% |
Reserve for uncertain tax positions | $ 0 | $ 0 |
Interest or penalties recognized | $ 0 | $ 0 |
Open tax year | 2,009 | |
Research Tax Credit Carryforward | ||
Income Tax [Line Items] | ||
Research and experimentation credits | $ 1,400,000 | |
Operating loss carryforwards, limitations on use | Utilization of net operating losses and tax credits, including those acquired as a result of the Merger, will be subject to an annual limitation due to ownership change limitations provided by Internal Revenue Code Section 382. The Company believes that an ownership change limitation as defined under Section 382 of the U.S. Internal Revenue Code occurred as a result of its various historical financing transactions, and its offering of common stock completed in June 2015. Future utilization of the federal net operating losses and tax credit carryforwards accumulated from June 2005 to the change in ownership date will be subject to annual limitations to offset future taxable income. The annual limitation may result in the expiration of the net operating losses and credits before utilization. As such, a portion of the Company’s net operating loss carryforwards may be limited | |
Tax credit carryforward, limitations on use | Utilization of net operating losses and tax credits, including those acquired as a result of the Merger, will be subject to an annual limitation due to ownership change limitations provided by Internal Revenue Code Section 382. The Company believes that an ownership change limitation as defined under Section 382 of the U.S. Internal Revenue Code occurred as a result of its various historical financing transactions, and its offering of common stock completed in June 2015. Future utilization of the federal net operating losses and tax credit carryforwards accumulated from June 2005 to the change in ownership date will be subject to annual limitations to offset future taxable income. The annual limitation may result in the expiration of the net operating losses and credits before utilization. As such, a portion of the Company’s net operating loss carryforwards may be limited | |
Earliest Tax Year | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration year | 2,025 | |
Latest Tax Year | ||
Income Tax [Line Items] | ||
Operating loss carryforwards expiration year | 2,036 |
Income Taxes - Income Tax Benef
Income Taxes - Income Tax Benefit Attributable to Our Loss from Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
U.S. federal income tax benefit at statutory rates | $ (5,591) | $ (3,891) |
State income tax benefit, net of federal benefit | (502) | (350) |
Research and experimentation credits | (268) | (181) |
Deferred tax asset adjustment | 65 | 76 |
Other | 137 | 188 |
Change in valuation allowance | 6,159 | 4,158 |
Total | $ 0 | $ 0 |
Income Taxes - Net deferred tax
Income Taxes - Net deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 51,758 | $ 46,056 |
Charitable contribution carryforwards | 552 | 454 |
Research and experimentation credits | 1,440 | 1,172 |
Capitalized intangibles | 781 | 746 |
Stock based compensation | 193 | 162 |
Depreciation and amortization | 6 | 2 |
Vacation accrual | 35 | 28 |
Other | 14 | |
Total deferred tax assets | 54,779 | 48,620 |
Valuation allowance | (54,779) | (48,620) |
Net deferred tax assets | $ 0 | $ 0 |
Subsequent Event (Details Textu
Subsequent Event (Details Textual) - USD ($) | Jan. 11, 2017 | Dec. 31, 2015 | Dec. 31, 2016 |
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Proceeds from sale of common stock | $ 37,000,000 | ||
Subsequent Event | JonesTrading | |||
Subsequent Event [Line Items] | |||
Percentage of selling commission per share sold | 3.00% | ||
Subsequent Event | Sales Agreement | JonesTrading | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.001 | ||
Proceeds from sale of common stock | $ 0 | ||
Subsequent Event | Maximum | Sales Agreement | JonesTrading | |||
Subsequent Event [Line Items] | |||
Aggregate offering price of common stock | $ 7,300,000 |